Funeral Poverty Debate moves up a gear in Parliament

Press Release

Royal London supports call for fundamental review of Social Fund Funeral Payment system

Evidence points to polarised society - those who can and those who cannot afford a funeral

This autumn, research commissioned for Royal London - the UK’s largest mutual life, pensions and investments company – confirmed that funeral poverty now affects almost 110,000 people in the UK, with the total value of funeral debt amounting to £142m.

The problem of personal debt caused by funeral costs lies at the heart of a national campaign led by Quaker Social Action, and now it moves into Parliament with a debate led by Emma Lewell-Buck MP. For the first time since 2008 the key factors which contribute to funeral poverty in the UK will be aired in a ‘Ten Minute Rule Bill’ in parliament on 9th December. Ms. Lewell-Buck will share evidence gathered from Royal London’s National Funeral Cost Index.

A key factor for discussion is the Social Fund Funeral Payment. Along with Ms. Lewell-Buck and many other experts, Royal London is calling for a fundamental review of the whole Social Fund Funeral Payment system. Royal London would like to see an immediate index linking of the system’s “other funeral costs” category. Capped at £700 since 2003, experts stress that it should have increased in line with inflation (as measured by the Retail Price Index), because doing so would mean it is worth £966 today, rather than remaining at the same level of £700 since 2003.

Commenting on the issue being raised in Parliament, Emma Lewell-Buck, MP said:

“The Social Fund Funeral Payment needs a complete overhaul. The amount is inadequate, leaving a shortfall, but just as important is the administration of the system. People don’t know if they’ll qualify for support until after they’ve signed up for the cost of the funeral. So the funeral will have happened and people may find out later they are not eligible for any help. This issue is not going away; it is only going to get worse. I do not want to see anyone going through the pain of not being able to afford to bury a loved one.”

“Royal London wants to shine a new light on funeral poverty, which remains a British taboo. Our study has not only revealed new data confirming how many people in the UK suffer from funeral poverty, but it’s also highlighted how the situation will worsen. The outdated Social Fund Funeral Payment system is a key factor. We believe it needs a full and fundamental review, and we’re talking to Government and industry about immediate ways to ease the pressure. For example, the Fund’s cap of £700 (in place to meet ‘other funeral expenses’) should be index-linked. We believe it should be adjusted in line with inflation, to reflect current UK living costs.”

Alan Slater MBE, CEO of the Association of Funeral Directors, added:

“The Social Fund Funeral Payment cap of £700, for ‘other costs’, has not changed since 2003 and we would like to see this increase. This figure has to cover all other costs in connection with the funeral, including a minister to conduct the service, which leaves funeral directors with little over £500 to cover their professional fees for arranging the funeral, provision of a hearse and other transport, a coffin, bearers and much more. In reality funeral directors’ costs average at around £1,500 now. That’s why there is this shortfall. The ‘other costs’ payment covers less than half the cost of even the most basic funeral. This shortfall gets bigger every year. The cap should be index-linked. It would not solve the problem, but it would be a step towards fairness in the system.”

Heather Kennedy, Funeral Poverty Officer, Quaker Social Action added:

“People are suffering in silence. Of all the issues around poverty I can think of, funeral poverty is the issue people are least likely to tell their friends and neighbours about. That’s why we don’t hear about it and it’s not on the radar. But it’s a problem that is set to get a lot worse; it’s not going away. At a local level we are getting more people coming to us month on month.”

Tim Morris, CEO of the Institute of Crematorium and Cemetery Management (ICCM), added:

“The Social Fund is totally inadequate. Only a small number of people benefit from it – usually it’s after the funeral, when they’re facing final demands for bills. This stress, combined with the risk that they won’t receive any money at all, can damage someone’s health, especially the elderly. Furthermore, the unsustainable nature of cemeteries is leading local authorities to continually build new sites. More sites means more maintenance costs (which are a massive perpetual burden on local authorities, and something no other party involved in funerals has to carry) and the costs lead to pressure on burial fees. New legislation is needed to transform cemeteries into fully sustainable community assets.”

The average cost of a funeral in the UK is £3,551, but the poorest UK households spend virtually the same amount on a funeral as the wealthiest UK households. And it is a ‘postcode lottery’ - charges can range from £2,859 for a cremation in Belfast, to £6,899 for a burial in Beckenham, Kent.

People in the UK are getting into debt to pay funeral costs - on an individual basis the average debt is £1,305; collectively this equates to £142m across the UK.

People are struggling to pay for funerals but showing resilience as they find ways to pay. Just under half (46%) of respondents said it cost ‘more’ than they expected, but despite the pressure only 11% of people in this group chose a cheaper funeral. 1 in 5 (20%) went into debt (paid using a credit card or a loan); over a third (35%) used their own savings to help pay for it; 28% borrowed money from family or friends.

One in five (22%) people said the deceased left no financial provision for the funeral; 37% of people admitted they wouldn’t mind a Public Health Funeral if it meant their family could avoid debt; over half (55%) agreed there’s not enough financial support available to bereaved families.

The “other funeral costs” category in the Social Fund Funeral Payment is intended to contribute to costs for Funeral Directors and ministers fees.

The total number of deaths in the UK in 2013 was 576,458. 19% of survey respondents said they struggled to meet funeral costs. This represents a UK-wide number of 109,527.

The level of funeral debt is calculated by multiplying the number of people who struggled to meet funeral costs by the average debt taken on (£1,304.95). This totals £142,927,285.

The Royal London National Funeral Cost Index comprises quantitative research conducted by YouGov, and data collected from the Institute of Cemetery and Crematorium Management (ICCM). The research was conducted from 14-22 August 2014.

Methodology:YouGov Reports commissioned two surveys on the YouGov Panel. The first surveyed approximately 13,000 nationally representative UK adults aged 18+ in order to produce a sample of 1,988 who had organised a funeral, and used the services of a funeral director in the last five years. The second surveyed a further 1,000 adults aged 18+ who had organised a funeral and used the services of a funeral director in the last five years.For the purpose of this research, YouGov’s Profile Data Library was used (contains information about YouGov’s 400,000+ panel members on a wide range of topics and is updated and populated continuously with new information). ICCM gathered burial and cremation fees for all UK crematoria and two burial locations within the catchment of each crematorium via internet searches and direct contact with burial and cremation authorities.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.